Strong organic demand fuels opportunities - The Packer

Strong organic demand fuels opportunities

02/28/2013 04:33:00 PM
Vicky Boyd

Organic leeksVicky BoydCold-hardy crops, such as organically grown leeks, fared well this winter and should be in good supply this spring, says Brian Peixoto, sales manager for Watsonville, Calif.-based Lakeside Organic Gardens.Demand for organics continues to grow, prompting conventional retailers to expand offerings and create opportunities for grower-shippers.

Samantha Cabaluna, director of communications for Earthbound Farm, San Juan Bautista, Calif., said the overall “good food movement” is one reason for organics’ increasing popularity.

The movement focuses on food nutritional value and food production practices, and organics fit in nicely, Cabaluna said.

In fact, Earthbound Farm saw sales of its organics increase 12% in 2012 compared with 2011, she said.

“Growth continues to be quite strong,” she said. “It’s across the board — everybody’s growing.”
Cabaluna said many conventional retailers have begun offering organics or increased dedicated space because they saw opportunities in an “exciting area of growth.”

No slowdown in sight

Paul Rabadan, organic sales manager for Oxnard, Calif.-based Deardorff Family Farms and an organic produce industry veteran, said the demand for organics is unending.

“It just continues to expand and grow, and the demand for good quality organic food increases every year,” he said. “I see no slowdown. Demand exceeds supply.”

Rabadan credited both organic and conventional retailers for the increase.

Deardorff Family Farms’ organic sales have continued to grow by about 25% per year, he said.

In response, the grower-shipper has expanded its offerings to include a wide array of cool-season vegetables, and it plans to bring another 70 acres of organic production on line in August.

Between production in the Oxnard-Ventura and Salinas, Calif., areas, Deardorff Family Farms is able to offer most organic items pretty much year-round, Rabadan said.

Russ Widerburg, sales manager for Boskovich Farms Inc., Oxnard, said he’s seen a new wave of demand for organics over the past year or two, fueled partly by more mainstream retailers.

Peter Oill, organic sales and marketing director at Boskovich Farms, said Whole Foods kicked off the trend.

“Whole Foods initiated the whole thing when they started getting big,” he said. “It forced the grocery stores to start competing with them. You’ll see more and more groceries start handling organics.”

Increased efficiency

One reason may be that organics have become more competitive on the growing end as more farms begin growing organically and growers become more efficient, Widerburg said.

As a result, f.o.b. prices for some items have decreased, making them more attractive to retailers, he said.

Boskovich Farms saw opportunities in the sector and has boosted its organic acreage nearly twofold, Oill said.

At the same time, it expanded organic offerings from the handful of “bread and butter items” it had carried the past five or six years to the current wide array that includes three colors of swiss chard, two varieties of kale and bunched beets.

Boskovich Farms also hired organic produce veteran Oill as director of sales and marketing for its B Organic line, Widenburg said.

“The long-term goal for us is to mirror our conventional to the extent we can,” he said.

The Nunes Co., which markets under the Foxy Organic label, has seen steady growth from its organic romaine hearts, celery and celery hearts, said Doug Classen, sales manager for the Salinas-based grower-shipper.

“There’s continued interest across the board from all aspects of the industry,” he said.

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